Michael Froman, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs

Via Teleconference

Washington, DC

March 14, 2011

OPERATOR: Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. After today’s presentation, we will conduct a question-and-answer session. To ask a question at that time, please press *1. Today’s conference is being recorded. If you have any objections, please disconnect at this time.

I would now like to turn the call over to Ms. Heide Fulton. Ma’am, you may begin.

MS. FULTON: All right, thank you very much. Good afternoon, everybody. Thanks for joining us today. In light of last week’s senior officials meeting for the Asia-Pacific Economic Cooperation, the meeting that was held in Washington last Wednesday, we have gotten together several senior U.S. Government officials to hold this on-the-record conference call.

Today we have with us Michael Froman, who is deputy assistant to the President and deputy national security advisor for international economic affairs; Wendy Cutler, U.S. Trade Representative*; and Kurt Tong, the U.S. senior official for APEC economy cooperation – Asia-Pacific economic cooperation.

So at this time I would like to turn it over to Mr. Froman, who will make some remarks, and then we will open it up for questions. Without further ado, Mr. Froman.

MR. FROMAN: Thank you, Heide. Well, first of all, welcome to the call. I had the pleasure of chairing the first senior officials meeting of the year last week here in Washington at the Reagan Building on the 11th and 12th, and I think it really set the groundwork for what we hope will be a very successful and productive year.

As many of you know who follow this area, President Obama affirmed our commitment to APEC and to the region last November when he was at the APEC Leaders Summit in Yokohama last year. And Secretary Clinton delivered an important address last week on the Asia-Pacific and our interests there.

The U.S. is looking to APEC this year for a series of tangible outcomes that will help benefit all the APEC member economies. Our informal theme for 2011 is “Get Stuff Done,” and we’re looking to make concrete, practical, and ambitious outcomes to advance the shared interests in the region and increase and underscore the relevance of APEC as an organization.

This first meeting of the senior officials, I think went a long way towards starting us down that path, and I just wanted to highlight a few of the major areas at work that we see going ahead.

We are focusing APEC this year under U.S. chairmanship on three major areas. First, strengthening regional economic integration and expanding trade. This builds on the work that APEC has done over much of the last 20 years, but this will focus this year on next generation trade and investment issues such as supply chain, performance, innovation, and trade and technology, and what the 21st century trade agreements in the region might look like.

The second area of work will be promoting green growth, and the senior officials began to discuss a number of areas of potential cooperation in this area, including addressing non-tariff barriers affecting trade and investment in environmental goods and services, promoting trade and environmental-related products, combating trade in illegal logging, and streamlining import procedures for advanced low-carbon demonstration vehicles. We will also be working on the – on APEC’s commitment to phase out inefficient fossil fuel subsidies and try to build on the work that’s been done over the last couple of years in that area.

The third major area at work is advancing regulatory cooperation and regulatory convergence. Here we were privileged to have Cass Sunstein, who is administrator of the Office of Information and Regulatory Affairs at OMB, to come and give opening remarks on what we’ve done domestically with regard to regulatory reform efforts. And that generated a lot of interest among senior officials from other economies and led to a discussion of possible areas of collaboration.

We’ll be building on that to develop proposals to work to strengthen the implementation of good regulatory practices and improve regulatory cooperation across APEC. Members also agreed to tackle the specific issues around barriers to trade in emerging green technologies, including smart grid technology.

In addition to the three areas at work, one thing we’ll be looking to do under our chairmanship this year is to find ways to work closely with the private sector to better align our work plan and the needs of the business community. And this will help keep us accountable for developing initiatives that are practical, effective, and support the needs of working Americans.

And we’ll be looking to host – co-sponsor a number of activities over the course of the year with the private sector on issues ranging from energy and transportation to food security to innovation to women’s entrepreneurship. So we look – one of the core elements of APEC is the relationship between government and the private sector, and we’ll be looking to underscore that relationship through our chairmanship across – throughout the year.

Obviously, one thing lingering in the background of the meeting was the tragedy in Japan. That tragedy plus the recent earthquakes in China and New Zealand reminded everybody how interconnected the region is and how important it is that we continue to work together, including in areas like emergency preparedness. And that’s one area where APEC has traditionally focused and will continue to focus.

With that, why don’t I open up the floor to questions for myself, Wendy, or Kurt.

OPERATOR: And if you would like to ask a question, please press *1 on your touchtone phone, please state your name and affiliation. To withdraw your question, please press *2. Again, to ask a question, please press *1. One moment, please, for our first question.

The first question is from Jamie Strawbridge. Your line is open.

QUESTION: Oh, hi, this is Jamie Strawbridge from Inside U.S. Trade. Just a quick question for Mr. Froman following up on his remarks. Mr. Froman, it seemed like the three areas that the U.S. is prioritizing in the context of the upcoming meeting align pretty nicely with U.S. negotiating objectives in the TPP negotiations. Can you explain that relationship a little bit and also let us know at this point what kind of outcome you are hoping for or think is realistic on TPP at the APEC summit? Thank you.

MR. FROMAN: Thank you. That’s a good question. You are right that these are some of the same issues that we are exploring in the TPP and, frankly, in a number of our other trade dialogues, including the Transatlantic Economic Council and other fora. So things like regulatory cooperation and promoting green growth and expanding trade are key components of the Obama Administration’s overall trade policy.

Nine of the APEC economies are involved, currently, in the TPP discussions. There are a series of meetings going on and negotiating rounds going on. We hope to develop a number of the core elements of a Trans-Pacific partnership agreement by the time of the meeting in Honolulu, and this will be an opportunity both to focus on those discussions as well as the broader APEC discussions.

OPERATOR: And the next question is from Jim Berger. Your line is open.

QUESTION: Yeah, thank you. Traditionally, I guess going back 10 years, APEC has always had a strong statement on the Doha trade negotiations. You didn’t mention it. Was it discussed last week?

MR. FROMAN: I think we discussed, yes, the whole range of issues, including Doha. I didn’t focus on it, in that it wasn’t an APEC-specific area of work, but it will be very much on the minds of the leaders. And in fact, there will be, as you probably know, a Trade Ministers’ meeting or Ministers Responsible for Trade meeting at the end of May in Big Sky in Montana, where I imagine Doha will also be one of the central issues discussed.

OPERATOR: And the next question comes from Sam Gilston. Your line is open.

QUESTION: Thank you. They gave Wendy a promotion to U.S. trade representative early on, and congratulations, Wendy.

My question is: On this APEC and the TPP, it seems that the going ahead parallel with the APEC talks and the TPP talks, you’re creating a two-tiered system of countries in Asia-Pacific, some that are in the TPP versus those that are out of it. And I’m wondering whether or not there was any reaction or concern by countries that you’re going in that direction, where a lot of countries in APEC won’t get the benefits of the TPP and maybe not even allowed to join, or will be.

MR. FROMAN: Yeah. No, I think the work of APEC and the TPP are complementary and reinforcing. APEC country – APEC economies, excuse me, are engaged in a series of trade-liberalizing activities, all directed towards trying to build a free trade area of the Asia-Pacific, and we see TPP as being an important contribution to that effort as well. As the previous question – questioner asked, there – or I think maybe the first questioner asked – there is some overlap between the issues that we’re talking about in TPP and the issues we’re talking about in APEC, and the non-TPP members are – they welcome the chance to discuss how to define the next-generation trade issues that could affect both tracks of discussions. So they’re really quite complementary and reinforcing, and again, all contribute to the concept and the idea of freer trade throughout the region.

OPERATOR: And the next question comes from Doug Palmer with Reuters. Your line is open.

QUESTION: Hi. I just wondered if you could talk a little bit more about the theme of promoting green growth within the region. What potential do you see there, and what are the impediments that you need to overcome in order to promote more growth?

MR. FROMAN: Thanks, Doug. Look, I think this is a theme, promoting green growth, that comes up in any number of fora, from the G-20 to a number of bilateral discussions we’ve had to APEC, as well. Our goal is, in the context of APEC, to help set direction in some concrete ways towards strategies of green growth. So, for example, addressing non-tariff barriers to trade in environmental goods and services, looking at certain environmental issues like illegal logging, streamlining obstacles to the import of low-carbon demonstration vehicles, focusing on the work that started in the G-20 and then went to the APEC economies regarding the phase-out of inefficient fossil fuel subsidies.

And my sense is – and this, by the way, applies more generally – we have tabled a number of ideas in all of these areas for APEC to consider, and the APEC economies themselves will tee up ideas of their own for us to include on the agenda this year. So it is an important theme that cuts across a lot of different issues. What we’ll be looking to do in APEC is to come up with some concrete ways of advancing that agenda.

OPERATOR: And again, if you would like to ask a question, please press *1 on your touchtone phone. One moment, please. Jamie Strawbridge, your line is open.

QUESTION: Hi, Mr. Froman, it’s Jamie again. Just wanted to ask another related Asia-Pacific issue. I mean, obviously in the context of APEC, the U.S. is also trying to advance these free trade agreements, and you’re having some talks with your Republican colleagues on the Hill. I mean, can I ask, are you seeing any possibility that this Administration could give a date certain for action on the Colombia FTA, as many Republican and some Democrats are asking? Or is that just an impossibility?

MR. FROMAN: Well, I don’t think I have much to add to what Ambassador Kirk has already put on the record in that regard. The President directed him to enhance his engagement with Colombia and Panama with the goal of resolving the outstanding issues as soon as possible and submitting the agreements immediately thereafter to Congress. And that’s the track we’re on.

We’ve had a number of meetings with the Colombians, including sending a delegation to Colombia on a fact-finding mission a couple of weeks ago, and having a delegation from Colombia up here last week for the beginnings of a dialogue. I’d be a pretty lousy negotiator if I set a particular date or deadline to reach an agreement. All I can say is we’re keenly focused on resolving the outstanding issues. And if we’re able to resolve the outstanding issues, we look forward to submitting it to Congress as soon as possible.

OPERATOR: And the next question is from Jim Berger with Washington Trade Daily. Your line is open.

QUESTION: Okay, thanks. Last week, I believe in your speech, you mentioned the need for some reform in APEC in the structure. Can you elaborate on that a little bit and also tell us how that was received?

MR. FROMAN: I think we – as we have done in the G-8 and the G-20, and as we look at parts of the architecture of international engagement more generally, we are always looking for opportunities to reform, upgrade, and revitalize international institutions. And APEC is one of those where we are looking for – from the agenda perspective, we’re looking for ways of making it as concrete as possible. From the interaction of the leaders’ perspective, we’ll be looking for ways to create opportunities for informal conversation and interaction amongst themselves and between them and the business community. And there have been a number of working groups and other processes that have grown up over the ages within APEC, and we’re taking a hard look at them, just to ensure that everything that’s being done either by the working groups or at the ministerial level is really critical to its overall function.

So it’s important that we use our opportunity as chair to try and keep these organizations as focused as possible on their core competencies and make sure that they’re achieving concrete results, and make sure that their activities are tied to their priorities. And I think all of that was welcomed by the other APEC economy representatives as well.

OPERATOR: And the next question comes from Julie Yang. Your line is open.

QUESTION: Hi, Mr. Froman. Thanks for taking this question. You had mentioned that the Doha Round was discussed during the meetings, and earlier today at the Chamber of Commerce, WTO Director General Pascal Lamy had said that he was taking a very cautious forecast for the conclusions of the Doha Round in Honolulu. Also, can you talk a little bit more about what you expect to see in terms of the Doha Round come --

MR. FROMAN: Just to be clear – just so I make sure I understand your question, are you referring to what is likely to happen in Honolulu with regard to the Doha Round or more generally?

QUESTION: Oh, throughout the whole year. Yeah.

MR. FROMAN: Yeah. Well, look, we are very much engaged in trying to pursue a ambitious agreement for the Doha Round. We’re engaged bilaterally with major trading partners. We’re engaged in the multilateral process in Geneva. We’re engaged plural laterally with various groupings of countries. And as the President has laid out before, we think it’s important that the Doha Round create meaningful market access if it’s going to achieve – (inaudible) necessary to come into force. So that’s the – that’s what we’re focusing on right now, and we hope that our major trading partners, including China, India, Brazil, will come to the table with a similar approach and a similar attitude with the objective of creating a strong agreement.

With regard to APEC in particular, at the meetings of the Ministers Responsible for Trade in late May in Montana, we expect that a portion of that meeting will be devoted to Doha and give an opportunity for ministers to exchange views and make progress on outstanding issues.

OPERATOR: And the next question is from Sam Gilston, Washington Tariff and Trade Letter. Your line is open.

QUESTION: Thank you. Sort of a follow-up on the Doha issues. Can you explain why or how you’re going through APEC rather than taking some of the issues that you’re raising in APEC and bringing them into the Doha? It seems this might be undermining a multilateral effort if you’re doing this on a regional basis. Is there some benefit, additional or separate benefit that you can get out of APEC that you can’t get out of Doha or out of the WTO in general?

MR. FROMAN: Well, Sam, I think we pursue these issues wherever and whenever we can. So, for example, on the issues of green growth and environmental goods and services, they’re in Doha; they’re in APEC; they’re in many of our bilateral discussions with major trading partners; they’re in our discussion with the European Union in the context of our Transatlantic Economic Council. So we try and pursue them wherever and wherever we can. I think that’s true of a number of these different issues.

OPERATOR: And the next question comes from Jamie Strawbridge. Your line is open.

MR. FROMAN: Jamie, this is your third question, isn’t it?

QUESTION: I feel like it’s Christmas come early for me. I mean – (laughter) – listen, I just wanted to ask one quick follow-up on TPP. The – do you think it’s still possible to get this done by next November, Mr. Froman? You talked about getting the core elements of a deal in place. Do you think it’s still possible we can get the whole deal or are we going to have to recalibrate? And if we can’t get the whole deal, can you – do you have any sense yet, personally, on what maybe could be like a concrete outcome, short of a whole deal, that you could work towards with Honolulu as the end date?

MR. FROMAN: Well, look, I don’t think we – I’m not going to deal with the hypothetical issue at this point. But I don’t – I think our goal is to make as much progress in developing the TPP concept by the time of Honolulu. We’re in a series of negotiations with our TPP partners, and the key thing is to reach as much of an agreement on the overall framework as we can by that time. But I wouldn’t want to set any particular goals or deadlines for reaching a finalized agreement.

OPERATOR: And the next question is from Jim Berger. Your line is open.

QUESTION: Well, actually this is the second part to the second question I asked. But was there any discussion about expanding the membership of APEC, or do you think the time has come to start discussing that?

MR. FROMAN: There was no discussion of it at this meeting.

Okay, I think we’re going to take one more question then we’ll be at the finish. I apologize that the folks are in between meetings right now, so I do appreciate everyone’s patience.

OPERATOR: And at this time, I am showing no further questions.

MR. FROMAN: Okay. Well, that works out fine. Heide, are you on?

MS. FULTON: Yes, yes, sorry. Thank you. Thanks everybody for joining us today. We certainly appreciate it. We’ll have a transcript of the conversation posted and released as soon as we can this afternoon.

MR. FROMAN: Thank you.

MS. FULTON: Thank you everyone.

* Wendy Cutler is the Assistant U.S. Trade Representative for Japan, Korea and APEC Affairs